Brazilian livestock could lose up to US$ 14 million a month with Russian suspension

The Brazilian livestock sector may fail to raise up to US$ 14 million monthly, according to a survey carried out by the CNN based on Foreign Trade Statistics (Comex), of the Ministry of Economy.

This is because, this Tuesday (8), Russian importers began to suspend Brazilian shipments of beef, chicken and pork. Monthly, Brazil collects around US$ 1 billion from the export of animal protein.

CNN confirmed with entities in the sector that businessmen in the European country do not know if they will be able to pay Brazilian remittances, since many banking channels were blocked due to the sanctions of the war.

Currently, Russia is the eighth largest importer of animal proteins in Brazil, with an average monthly purchase of 20,000 tons, according to the most recent report by the Institute for Applied Economic Research (IPEA).

The country is behind, for example, the United States, Egypt and China — the latter represents 40% of all Brazilian exports.

Data from the Ministry of Economy indicate that Russia imports, on average, US$ 5.5 million of chicken meat from Brazil on a monthly basis. Typically, in the same period, the European country also spends, respectively, US$ 5.2 and US$ 3.3 million on the acquisition of beef and pork.

Experts heard by CNN on Tuesday (8) say that the Russian suspension will bring a greater supply of meat to the Brazilian market.

However, despite the greater amount of product in the country, the tendency is for the price of inputs to remain stable, according to Ana Cecília Kreter, PhD in Economics and associate researcher at IPEA.

The researcher explains that the movement should be overshadowed by the unfavorable global scenario caused by the war in Ukraine.

“I do not believe that there will be a drop in the price for the Brazilian final consumer in terms of protein. The problem is that the price of meat has been very high for months. And the value of grains is also a record, inputs that are totally related to the price of protein”, said Ana Cecília.

“The global scenario is one of high values ​​for the sector. This all overshadows that movement,” she added.

The researcher also details the consequences on the international economy of the war between Russia and Ukraine, which has lasted more than 13 days.

“Conflict brings insecurity to the international market for all nations. In conjunction with this, we have to stress the importance of Russia in the global market, and this affects all countries directly and indirectly,” he said.

“There is the question of oil, fertilizers. The war brings total destabilization to the entire production chain”, concluded Ana Cecília Kreter.

The interruption in Russian imports takes place in the midst of an attempt by the European country to increase consumption of Brazilian meat, according to consultancy Safras & Mercado, the largest representative of the sector in Brazil.

According to the company’s chief economist, Fernando Iglesias, Russia was scheduled to buy up to 200,000 tonnes of Brazilian beef and 100,000 tonnes of pork annually. However, the current scenario frustrated the plans of both countries.

“It became more complicated to see a relevant volume of protein purchases by the Russians, since payment methods are all blocked because of the war,” he said.

“Local businessmen would have to think of unusual mechanisms to make the transaction for Brazilian producers. And due to these logistical problems, I believe that Russia will not reach this programmed volume”, highlighted Iglesias.

CNN reached out to the Ministries of Agriculture, Livestock and Supply; and that of the Economy to find out if the decision of Russian businessmen has already been communicated and if they intend to take any action, but we are still waiting for a response.